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on Positive Political Economics |
| By: | Caroline Le Pennec (SoDa Laboratories, Monash University) |
| Abstract: | In representative democracy, individual candidates often run for parliamentary seats under a national party platform, which limits their ability to compete on policy issues at the local level. I exploit a novel dataset of 30,000 candidate manifestos issued before the first and second rounds of nine French legislative elections to show that politicians strategically adjust their campaign communication to persuade voters who do not support their platform—not by moderating their policy positions but by advertising neutral non-policy issues instead. Doing so predicts better performance in office and may therefore provide voters with information that matters for representation. |
| Keywords: | Electoral competition, Campaign Communication, Political economy, Text as data |
| JEL: | D72 D83 |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:ajr:sodwps:2020-05&r=all |
| By: | Akbulut-Yuksel, Mevlude (Dalhousie University); Okoye, Dozie (Dalhousie University); Turan, Belgi (University of Houston) |
| Abstract: | This paper provides causal evidence on how political parties consolidate power in an electoral democracy. We collect administrative data on expressway construction by the Justice and Development Party (AKP) in Turkey, and use province-by-year variation in expressway construction to show that vote shares for the AKP increased in response to the expressways. For the average province in which the length of the expressway network increased from 51km to 193km, the estimates imply that the expressway expansion increased the AKP's vote share by 4.2 percentage-points or one-third of the increase from 2002 to 2011. Electoral gains by the AKP primarily came at the expense of its more established rivals. The estimates account for province and year fixed effects, which allows us to control for any fixed province characteristics and time-specific factors that might be related to expressway expansion and vote shares. We further show that the estimates are robust to arbitrary region-specific time trends, province-specific quadratic time trends, and are not driven by province-by-year variation in other investments undertaken by the AKP. Examining mechanisms, we do not find evidence that increased economic growth due to the express-ways drove increased vote shares for the AKP. We find evidence that the visibility and success of the expressway expansion project signalled competence and stability. The electoral benefits of the expressway were stronger in provinces that experienced greater political instability between 1995 and 2002, losses for the rival parties were greater in provinces they previously controlled indicating changes in perception, and there were no similar electoral gains to less visible projects. |
| Keywords: | expressways, political economy, voting, Turkey |
| JEL: | H54 N45 N95 O18 P16 |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13795&r=all |
| By: | Balasubramaniam, Vimal (Queen Mary, University of London, CEPR, UK and CAGE); Bhatiya, Apurav Yash (University of Warwick); Das, Sabyasachi (Ashoka University, India) |
| Abstract: | We examine whether holding national and state elections simultaneously or sequentially affects voter decisions and consequently, electoral and economic outcomes in India. Synchronized elections increase the likelihood of the same political party winning constituencies in both tiers by 21%. It reduces split-ticket voting, increases the salience of party among voters and shifts voters’ priority to state issues, without significantly affecting turnout and winning margin. A model of behaviorally constrained voters with costly information acquisition best explains our results. Finally, synchronization results in insignificant economic gains. Our findings have implications for the design of elections to multiple tiers of government. |
| Keywords: | JEL Classification: |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:485&r=all |
| By: | Felix Bierbrauer (University of Cologne); Mattias Polborn (mattias.polborn@vanderbilt.edu) |
| Abstract: | Gerrymandering undermines representative democracy by creating many uncompetitive legislative districts, and generating the very real possibility that a party that wins a clear majority of the popular vote does not win a majority of districts. We present a new approach to the determination of electoral districts, taking a design perspective. Specifically, we develop a redistricting game between two parties who both seek an advantage in upcoming elections, and show that we can achieve two desirable properties: First, the overall election outcome corresponds to the popular vote. Second, most districts are competitive. |
| Keywords: | Gerrymandering, Popular Vote |
| JEL: | C72 D71 D72 D82 |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:ajk:ajkdps:034&r=all |
| By: | Zurlinden, Noémie; Valladares-Esteban, Arnau; Gottlieb, Charles |
| Abstract: | We exploit the quasi-random allocation of asylum seekers across Swiss cantons and the high frequency of national referenda to identify the causal effect of immigration on political outcomes in receiving countries. We find that the arrival of asylum seekers causes voters to increase their support for right-wing and conservative policies. However, this effect is driven by episodes of unusually high inflows of asylum seekers. Moreover, we find that for votes on immigration and refugee policy, the arrival of more asylum seekers shifts voters towards policies endorsed by conservative and centre-right parties but not towards positions backed by the rightmost anti-immigration party. In contrast, the shift towards the rightmost stances is sizeable in votes related to the welfare state, international integration, and the rights of minorities. |
| Keywords: | Immigration, political preferences, re-distribution, quasi-random allocation |
| JEL: | D72 F22 H80 |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:usg:econwp:2020:18&r=all |
| By: | Okada, Keisuke; Samreth, Sovannroeun |
| Abstract: | This study examines the effects of political regimes on technology diffusion, using data from a sample of 104 technologies from 137 countries between 1901 and 2000. We find that democracy is positively associated with the diffusion of health and agriculture-related technologies. Furthermore, the diffusion of infrastructure, general, and other sector-specific technologies are not influenced by political regimes. |
| Keywords: | Technology diffusion; Democracy; Dictatorship |
| JEL: | O33 O40 P16 |
| Date: | 2020–10–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:103728&r=all |
| By: | Massimo Bordignon; Tommaso Colussi |
| Abstract: | This paper develops a theoretical framework that makes predictions on (a) the conditions under which a populist party decides to run and the policy position it takes and (b) voters’ response under different electoral systems. We test these predictions using data on Italian municipal elections over the 2009-2019 period and focusing on the electoral outcomes of the Five Star Movement. The empirical analysis shows: (i) populists are more likely to run under a Dual Ballot (DB) system and in municipalities where there is a large share of dissatisfied voters; (ii) when the populist runs, turnout increases under both Single and Dual Ballot systems; (iii) in a DB system, the populist candidate who ranked second in the first round has a higher probability of winning than the candidate of traditional party who ranked second by the same margin, as a result of increased turnout in the second round. We finally provide evidence that the low education and the young age of populist candidates are likely to deteriorate the efficiency of the local administration. |
| Keywords: | voting behaviour, populism, Five Star Movement, municipal elections |
| JEL: | D72 D74 H56 D91 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8626&r=all |
| By: | Florian W. Bartholomae; Chang Woon Nam; Pierre Rafih |
| Abstract: | Based on an extended welfare chauvinism concept that more systematically integrates the labor market and public finance aspects, this paper examines the impact of the refugee crisis − which culminated in the EU in 2015/16 − on changes in voting behavior in Germany (revealed in the two German federal elections in 2013 and 2017), explaining the attitudinal preference for ethnic boundaries around national welfare systems and the emergence of the right-wing populist party AfD. For this dynamic approach, an OLS analysis is conducted based on county-level data. The variables are selected taking into account existing theoretical and empirical findings in the international context, combined with Germany-specific facts and experiences, local demographic and economic differences, and party-specific voter characteristics. Among the key empirical findings are sufficiently reliable indications of the occurrence of welfare-chauvinistic effects that led to the success of the AfD in the 2017 election. |
| Keywords: | welfare chauvinism, immigration, right-wing populist party, refugee crisis, German federal elections |
| JEL: | D72 F22 J15 P16 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8629&r=all |
| By: | Thiemo Fetzer (Department of Economics, University of Warwick); Robert Gold (University of Potsdam, IfW, and CESifo.) |
| Abstract: | This paper provides an overview on current research on the rise of populism in Europe. The focus is on economic developments that foster voting for populist parties and candidates. The paper argues that the simultaneity of macro-economic shocks from the financial crisis, globalization, and technological change increased inequality between skill and income groups. This increased the demand for populist policies amongst those on the losing side of economic development. Perceived distributional conflict was exacerbated by immigration and austerity policies. Economics alone, however, is not sufficient for explaining the large increases in electoral support of populists. While culture also plays a role, it is the individual voter who eventually decides whom to vote for. And populist parties are particular successful in developing strategies to attract voters that feel anxious about current and future economic developments. |
| Keywords: | populism, protest voting, globalization, European Union |
| JEL: | D72 F5 F6 H3 H5 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:agz:wpaper:1901&r=all |
| By: | Marco Frank; David Stadelmann |
| Abstract: | We analyze the impact of elected competitors from the same constituency on legislative shirking in the German Bundestag from 1953 to 2017. The German electoral system ensures that there is always at least one federal legislator per constituency with a varying number of elected competitors from the same constituency from zero to four. We exploit the exogenous variation of elected competitors by investigating changes in competition induced by legislators who leave parliament during the legislative period and their respective replacement candidates in an instrumental variables setting with legislator fixed effects. The existence of elected competitors from the same constituency decreases absence rates in roll-call votes by about 6.1 percentage points, which corresponds to almost half of the mean absence rate in our sample. This effect is robust to the inclusion of other measures for political competition. |
| Keywords: | Political Competition; Accountability; Absence; Rent Seeking; Political Representation |
| JEL: | D72 D78 H11 |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:cra:wpaper:2020-20&r=all |
| By: | Alberto Grillo (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université) |
| Abstract: | Voting in large elections appears to be both ethically motivated and influenced by strategic considerations. One way to capture this interplay postulates a rule-utilitarian calculus, which abstracts away from heterogeneity in the intensity of support (Feddersen and Sandroni 2006, Coate and Conlin 2004). I argue that this approach is unsatisfactory when such heterogeneity is considered, since it implies that idiosyncratic preferences are irrelevant for participation, in contrast to the empirical evidence. A model of Kantian optimizationà la Roemer (2019), based on the maximization of individual utility under a universalization principle, predicts instead differential participation and links ethical motivation to the spatial theory of voting. |
| Keywords: | Voting,Turnout,Ethical Voter,Rule-utilitarian,Kantian Optimization |
| Date: | 2020–10–08 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-02962464&r=all |
| By: | Hager, Anselm (Humboldt-Universit¨at zu Berlin); Hensel, Lukas (University of Oxford); Hermle, Johannes (University of California, Berkeley and IZA); Roth, Christopher (University of Warwick) |
| Abstract: | Does party competition affect political activism? This paper studies the decision of party supporters to join political campaigns. We present a framework that incorporates supporters’ instrumental and expressive motives and illustrates that party competition can either increase or decrease party activism. To distinguish between these competing predictions, we implemented a field experiment with a European party during a national election. In a seemingly unrelated party survey, we randomly assigned 1,417 party supporters to true information that the canvassing activity of the main competitor party was exceptionally high. Using unobtrusive, real-time data on party supporters’ canvassing behavior, we find that treated respondents are 30 percent less likely to go canvassing. To investigate the causal mechanism, we leverage additional survey evidence collected two months after the campaign. Consistent with affective accounts of political activism, we show that increased competition lowered party supporters’ political self-efficacy, which plausibly led them to remain inactive. |
| Keywords: | Party Activism, Electoral Competition, Field Experiment, Campaigns JEL Classification: |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:488&r=all |
| By: | Stephen J. Ferris (Department of Economics, Carleton University); Marcel-Cristian Voia (Department of Economics, University of Orleans) |
| Abstract: | Canada, like many developed economies, has experienced a decline in voter turnout since the early 1990s. This paper examines the extent to which aggregate data can explain the movement of voter turnout over time. Time series concerns suggest that OLS results indicating that changes in constituency size, the proportion of the population registered to vote, the degree of wealth inequality, the degree of political competition and the evolving interests of younger voters can all help to explain a good portion voter turnout over the post 1976 time period may be spurious. ARDL re-estimation re-establishes a narrower form of cointegration, confirming a number of hypotheses while rejecting the hypotheses that changes in the proportion of young people in the electorate and voter alienation, as proxied by the Gini coefficient, have played a significant role in affecting voter turnout in Canada. |
| Keywords: | voter turnout |
| JEL: | D72 D78 H62 |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:car:carecp:20-18&r=all |
| By: | Diaf, Sami; Döpke, Jörg; Fritsche, Ulrich; Rockenbach, Ida |
| Abstract: | Using corpora of business cycle report sections dealing with monetary and fiscal policy issues from 1999 to 2017 and using methods of unsupervised text scaling (Slapin and Proksch, 2008; Lauderdale and Herzog, 2016), namely Wordfish and Wordshoal we scale the institutions' theoretical/ideological position over debates. The results are in line with the findings from descriptive textual analysis. For monetary policy, we observe a strong but short-lived consensus in debate-specific positions at the height of the financial crisis in 2008 and a larger polarization after 2008 compared to the sample period before. For the fiscal policy textual corpus, the polarization was similarly high before and after the crisis. For both policy areas, the institutions DIW Berlin and IfW Kiel define the outer bounds of the observed spectrum of latent ideological positions. |
| Keywords: | Text Scaling Model,Wordfish,Wordshoal,Computational Content Analysis,Hierarchical Factor Model,Bayesian Estimation,Political Economy,Ideology,Polarization,Public Policy,Monetary Policy,Fiscal Policy |
| JEL: | E32 E52 E62 H3 C55 D7 P16 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:pp1859:24&r=all |
| By: | Slotwinski, Michaela; Stutzer, Alois; Bevelander, Pieter |
| Abstract: | We study the causal effect of the possibility to vote on foreigners propensity to naturalize, a key indicator of successful integration. Based on Swedish administrative data and an institutional setting producing a quasi-random assignment of the eligibility to vote, we find that the overall effect depends on the composition of the migrant population. For immigrants from places with poor living conditions, we observe that the experience of non-citizen voting rights substantially increases their propensity to naturalize. In contrast, for those coming from places with a high standard of living, the same experience reduces it. Both reactions clearly reveal that individuals assign a positive value to formal democratic participation rights. While the behavior of the former group is likely dominated by the motivational force inherent in the possibility to participate, the behavior of the latter group reflects the devaluation of formal citizienship if it is decoupled from democratic rights. |
| Keywords: | citizenship,migration,naturalization,value of voting,voting rights |
| JEL: | D02 J15 K37 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:20055&r=all |
| By: | Ananish Chaudhuri; Vegard Iversen; Francesca R. Jensenius; Pushkar Maitra |
| Abstract: | Who gets elected to political office? The negative selection hypothesis posits that the inherently dishonest run for office, expecting to earn political rent. Alternatively, the positive selection hypothesis suggests that individuals join politics to make a difference. Developing country politicians are frequently stereotyped as embodiments of the negative selection hypothesis. Using survey and experimental data covering village councils in rural West Bengal, we find that inexperienced village council politicians are less dishonest and more pro-social than ordinary citizens. Our findings also suggest that this idealism wears off with time. |
| Keywords: | selection into politics, politician quality, corruption, experiments, behavioural games |
| JEL: | C93 O12 O53 Z18 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8597&r=all |
| By: | Dic Lo (Department of Economics, SOAS University of London); Yuning Shi (Department of Economics, SOAS University of London) |
| Abstract: | The control of the COVID-19 crisis requires strong and rapid actions of each nation-state, but multiple facets of the ineffectiveness have been exposed so far. This paper seeks to characterise and assess the handling of the public health emergency in China and the United States. The exposition focuses on the governance structures and state-people dynamics of the two countries, drawing on the framework of “exit, voice, and loyalty†developed by Albert Hirschman. The paper concludes that the Chinese “tough model†appears to have facilitated a virtuous circle of the state-people interaction, whereas the US “loose model†has led to a vicious circle. |
| Keywords: | coronavirus; systemic challenges; governance; state-people relationship; comparative political economy |
| JEL: | H12 I18 P16 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:soa:wpaper:237&r=all |
| By: | Koenig, Christoph (University of Bristol) |
| Abstract: | I study the adverse political effects of WW1 in Weimar Germany. Using novel data on WW1 veterans and an election panel from 1893-1933, I show that former soldiers are associated with a sizeable, persistent and potentially momentous shift in political preferences from left to right. Contrary to historical accounts, this shift cannot be explained by exposure to violence or other polarising post-war events. Rather, I provide suggestive evidence that war participation made veterans highly receptive to Red Menace fears of a Socialist revolution. This alienated veterans from leftwing parties and drove the majority towards inclusive, rightwing parties using anti-left platforms. |
| Keywords: | JEL Classification: D72, N43, N44 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:497&r=all |
| By: | Michael Coury |
| Abstract: | How does exposure to risk shape individual preferences for an expanded state? I examine this question in the context of a source of risk prominently featured in the public discourse: climate change. I use variation in California wildfire activity to study how demand for government services evolves following exposure to climate change associated disaster events. I find that Census block groups experiencing a large fire in the two years preceding a biennial Congressional election increase support by 0.7 percentage points for ballot initiatives which expand government spending and taxation. Preference for a more activist state is stronger on the issues rendered most salient by fire exposure, as I document a larger increase of 2.6 percentage points in support for ballot initiatives endorsed by pro-environment interest groups. The effect of fire exposure is stronger in more Republican areas and decays with distance from a fire. The effect does not appear to be driven by shifts in voter registration or turnout, suggesting that the mechanism is indeed changes in individual preferences rather than compositional changes in the electorate. |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:pit:wpaper:7023&r=all |
| By: | Francesco Amodio; Leonardo Baccini; Giorgio Chiovelli, and Michele Di Maio |
| Abstract: | This paper explores the micro-foundations of the trade-conflict nexus. We focus on the reduction of tariffs on agricultural imports from South countries to North countries as resulting from Preferential Trade Agreements. We combine the variation in agricultural tariffs over time with differences in crop suitability across districts within South countries. Our analysis covers 27 South countries and all their PTAs signed with major North countries between 1995 and 2014. Our approach rests upon the observation that differences in agro-climatic conditions within the country generate exogenous variation in suitability to produce different crops. Using 9km x 9km cells as unit of observations, we test if the North-South trade liberalization agreement affect levels of political violence and instability differentially in those districts that are more suitable to produce liberalized crops. We find robust evidence that in those cells, PTAs increase economic output and political violence, in line with the rapacity effect mechanism. |
| Keywords: | Political violence, trade, agriculture, preferential trade agreement. |
| JEL: | D22 D24 F51 N45 O12 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2020/41&r=all |
| By: | Hager, Anselm (Humboldt-Universit¨at zu Berlin); Hensel, Lukas (University of Oxford); Hermle, Johannes (University of California, Berkeley and IZA); Roth, Christopher (University of Warwick) |
| Abstract: | Collective action is the result of the efforts of groups consisting of many individuals. This gives rise to strategic interactions: the decision of an individual to participate in collective action may depend on the efforts of both like-minded and opposing activists. This paper causally studies such strategic interactions in the context of left- and right-wing protests in Germany. In an experiment, we investigated whether randomly varied information on turnout of both like-minded and opposing movements impacts activists’ willingness to protest. In response to information about high turnout of their own group, left-wing activists increased their willingness to protest, consistent with theories of conditional cooperation. In contrast, right-wing activists decreased their willingness to protest, consistent with instrumental accounts and free-riding motives. For both groups, there was no significant reaction to information about turnout of the opposing movement. The results highlight substantial heterogeneity in strategic interactions and motives across the political spectrum |
| Keywords: | Political rallies, field experiment, strategic behavior, beliefs JEL Classification: |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:491&r=all |
| By: | Michael Blanga-Gubbay; Paola Conconi; Mathieu Parenti |
| Abstract: | We study the role of firms in the political economy of trade agreements. Using detailed information from lobbying reports filed under the Lobbying Disclosure Act, we find that virtually all firms that lobby on free trade agreements (FTAs) support their ratification. Moreover, relative to non-lobbying firms, lobbying firms are larger, and more likely to be engaged in international trade and to operate in comparative advantage sectors. To rationalize these findings, we develop a model in which heterogeneous firms decide whether to lobby and how much to spend in favour or against a proposed FTA. We show that the distributional effects are asymmetric: the winners from the FTA have higher stakes in the agreement than the losers, which explains why only pro-FTA firms select into lobbying. The model also delivers predictions on the intensive margin of lobbying. In line with these predictions, we find that firms spend more supporting agreements that generate larger potential gains - in terms of the extent of the reduction of tariffs on their final goods and intermediate inputs, the depth of the agreement, and the export and sourcing potential of the FTA partners - and when politicians are less likely to be in favor of ratification. |
| Keywords: | Trade agreements, endogenous lobbying, heterogeneous firms |
| JEL: | F13 F53 F61 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2020/25&r=all |
| By: | Laurie Laybourn-Langton (Institute for Public Policy Research (IPPR), University College London (UCL)); Laurie Macfarlane (Institute for Innovation and Public Policy (IIPP), University College London (UCL)); Michael Jacobs (Sheffield Political Economy Research Institute (SPERI), University of Sheffield) |
| Abstract: | Modern economic history can be roughly split into different eras in which certain sets of ideas dominate politics and policy-making. This paper seeks to understand if a shift in the ‘political economic paradigm’ is currently under way by inspecting the state of debates across a range of economic policy areas. It introduces the concept of ‘orthodox’, ‘modified’ and ‘alternative’ paradigms, corresponding to the status quo, its modification in the face of disruption or changed political goals, and a fundamental break from that status quo, respectively. Its central conclusion is that a significant shift is under way in many economic policy areas in many mainstream economic institutions. This shift has mainly occurred from ‘orthodox’ paradigm approaches – those that might broadly be described as based on neoclassical principles – to a ‘modified’ approach that alters the neoclassical approach in many ways but maintains its fundamental basis. Little to no movement towards what might be described as truly ‘alternative’ paradigm approaches is yet under way, though some mainstream institutions are exhibiting openness to these ideas. As such, an overall paradigm shift away from the dominant neoliberal paradigm is not yet underway. |
| Keywords: | political-economic paradigm; neoliberalism; heterodox economics |
| JEL: | B20 B25 E00 H10 P16 P50 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:agz:wpaper:1902&r=all |
| By: | Emily Blanchard; Chad P. Bown; Davin Chor |
| Abstract: | We find that Republican candidates lost support in the 2018 congressional election in counties more exposed to trade retaliation, but saw no commensurate electoral gains from US tariff protection. The electoral losses were driven by retaliatory tariffs on agricultural products, and were only partially mitigated by the US agricultural subsidies announced in summer 2018. Republicans also fared worse in counties that had seen recent gains in health insurance coverage, affirming the importance of health care as an election issue. A counterfactual calculation suggests that the trade war (respectively, health care) can account for five (eight) of Republicans’ lost House seats. |
| Keywords: | trade war, trade policy, retaliatory tariffs, agricultural subsidies, health insurance coverage, voting |
| JEL: | F13 F14 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8587&r=all |